Tech Tools Serve Retailers’ Diverse Needs
Q: What do retailers need to know about working with 3PLs today?
A: Retailers are challenging third-party logistics (3PL) providers to supplement their offerings with a broader range of services. To obtain and retain business, 3PLs must meet retailers' diverse reporting, visibility, and delivery needs—yet not increase their cost structure.
Achieving this goal is particularly problematic without adaptive software. There is no one-size-fits-all solution for carton tracking. 3PLs using multiple platforms must integrate that data, not only between carton-tracking systems, but also with accounting and other enterprise systems. The more manual integration is required, the more it affects both 3PLs' efficiency and retailers' shipping rates. Logistics providers who choose agile solutions will be better positioned to meet retailers' varied needs.
Additionally, 3PLs with data visibility at both the micro and macro levels can offer better performance. It's critical to be able to see what's in any carton, at any time, anywhere in the delivery process. But it's also important to have big-picture visibility, such as on-time delivery and on-time performance across the enterprise.
Q: What technology trends have the most impact on retail distribution?
A: One trend with a lot of potential is the ability to repurpose data across functions. Automating a single process increases efficiency, but when the data from the automation of one process can be shared to automate another process elsewhere in the enterprise or supply chain, it can create an exponential advantage.
For example, many retailers use data provided in carton tracking to populate enterprise systems. It's a seemingly obvious, but very innovative, idea that does away with the previous model of re-scanning cartons at the store. If only one hour per week of time were saved at $10 per hour at 1,000 stores, the annual savings would be $520,000—simply by eliminating the need for store personnel to re-scan cartons.
Innovations like this save not only pure labor costs, but also the opportunity cost associated with pulling associates off the sales floor. It's a classic example of using technology to enable employees to focus on the activities of their core business.
Q: What should retailers consider when choosing a technology provider?
A: Every retailer faces a unique set of business challenges. Technology providers should offer innovative ways to modify applications to meet these needs. Whether it's a variation of distribution center bypass, moving wholesale freight with a carton-tracking system designed for store delivery, or a custom store operations Web site for expected deliveries, customization is key.
Building custom applications from scratch is both time- and cost-prohibitive. For both 3PLs and retailers, investing in a technology partner that supports customization and flexibility at a moderate cost is a strategy for long-term adaptability and growth.